Elasticity of Supply and Demand: A Microeconomic Analysis of ExxonMobil and their Synthetic Oil Brand, Mobil-1 Southern New Hampshire University MBA Economics for Business 01:47:14 GMT -05:00 Elasticity of Supply and Demand: A Microeconomic Analysis of ExxonMobil and their Synthetic Oil Bra...
Elasticity of Supply and Demand: A Microeconomic Analysis of ExxonMobil and their
Synthetic Oil Brand, Mobil-1
Southern New Hampshire University
MBA 502-10032 Economics for Business
01:47:14 GMT -05:00
, Elasticity of Supply and Demand: A Microeconomic Analysis of ExxonMobil and their
Synthetic Oil Brand, Mobil-1
ExxonMobil was founded in the late 1800s as a distributor of kerosine and has continued
its existence for over 140 years (Our History 2023). While researching ExxonMobil many
products are available to discuss, the topic in this document will be Mobil-1, a synthetic motor
oil brand. ExxonMobil is part of the crude oil industry where supply equals demand, meaning the
market is always in equilibrium.
Defining Supply, Demand, and Elasticity
Before discussing how ExxonMobil is affected by the elasticity of supply and demand, it
is important to define the terms broadly. Miller defines supply as “the quantities of goods and
services that firms will offer for sale to the market” (Miller, Economics Today 2021 p. 58).
Whereas demand is defined as “the quantities of specific goods or services that individuals…will
purchase at various prices” ((Miller, Economics Today 2021 p. 49). Elasticity regarding
economics is how responsive the price or quantity is to a change in price.
Non-Price Factors on Supply
Multiple non-price factors impact the supply of Mobil-1. These non-price factors are
known as the ceteris paribus conditions. One such condition is defined as changes to technology
and productivity. Assume that the overall processing of crude oil, a key component in Mobil-1,
becomes better. This causes the overall price of production to decrease, which allows for a larger
quantity of products to be produced as the total overhead cost has decreased. Whereas if the
current technology is detrimental to production, causing ExxonMobil to go back to an expensive
01:47:14 GMT -05:00
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